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THE FEDERATION of Malaysia made a rare and unexpectedly early appearance in the debt markets this week with its ¥74bn ($500m) securitisation backed by Japan's Ministry of Trade & Industry (MITI). Arranged by Nomura Securities Tokyo, the five year deal had an unusual and unique structure that posed the first test of investor responsiveness to the numerous credit enhanced and guaranteed deals likely to emerge from Asia next year.

MERRILL Lynch Asia Pacific suffered a new wave of restructuring late last week with the loss of further senior staff including three senior directors and the reassignment of two more. Chief among the casualties were the bank's head of debt trading Stewart Booth who had only been drafted over from New York last February, head of derivatives marketing Stevan Lambert, credit derivatives trader David Page and Australian head of fixed income Keith Bailey.

FOLLOWING the assignment of a AA rating from Standard & Poor's last month, Taiwan Power (Taipower) is planning to seek an official licence enabling the state-owned group to approach the international bond markets. Funding officials said however, that while the group has a $1.5bn foreign exchange need for its $3.7bn Tatan project, it may still raise the amount through the domestic bond markets.

MERRILL Lynch and Salomon Smith Barney generated an oversubscription level of 3.5 times for Pohang Iron & Steel's (Posco) ADR issue this week despite an increase in size from $250m to $300m. The sale is the largest from Asia since April and if, as expected, the pioneering 15% greenshoe is exercised, it will be the largest ever from Korea. A largely positive endpiece to a difficult year was overshadowed by some criticism among bankers that the deal was mispriced after the ADR shot up 17.2% on the first day of trading. Bankers defended the pricing, arguing that the government saw the sale as a benchmark for the new privatisation process.

THE JAPANESE government's $7bn selldown of shares in telecoms giant NTT is likely to be comfortably covered when the deal closes today (Friday), with Japanese retail investors and European institutions driving the deal. Pricing is expected at the tight end of the 3% to 5% discount range announced last week and bankers said that the share price appears to have stabilised around the ¥900,000 level * up from ¥890,000 a week ago * although the last minute fluctuations common in Japanese offers could not be ruled out.

* Bear Stearns has privately placed a collateralised bond obligation for Income Partners Asset Management (Asia) Ltd, backed by bonds from Asian issuers. Balanced Asian Credit Corp offered $51.5m of senior notes rated A2 by Moody's, maturing in November 2004, and a subordinated tranche not rated by Moody's. The notes are backed by some $72.5m of mainly fixed rate, convertible and non-convertible bonds issued in dollars by Asian borrowers.

THAI Airways (THAI) has chosen a consortium led by Credit Suisse First Boston as its adviser for privatisation next year. The other competing consortia for the role was led by Merrill Lynch and Warburg Dillon Read. The other members of the winning consortium are Dresdner Kleinwort Benson, Jardine Fleming Thanakom and Asset Plus Securities. The group will be responsible for finding the best way to sell the government's stake in the flag carrier. "There will be an initial study phase to determine whether a market or trade sale would be most appropriate," said a banker.

Bank Nederlandse Gemeenten NV Rating: Aaa/AAA/AAA

ELAN, the Irish pharmaceuticals group, raised $750m this week through the sale of Liquid Yield Option Notes (Lyons) via Merrill Lynch, taking advantage of a bullish week for pharmaceutical stocks. "This was a perfectly timed deal that accessed an important area of demand," said a salesman. The deal tapped into a market teaming with activity in the pharmaceuticals, drugs and chemicals sectors.

Argentina * HSBC Banco Roberts SA

DEUTSCHE Bank, arranger of the debt backing Legal & General Ventures Ltd's (LGV) acquisition of Emtec Magnetic, has closed general syndication after a slight oversubscription was raised. The arranger hopes to sign the deal before Christmas. Senior debt totals DM233m, consisting of a DM143m 5-1/2 year term loan (Term 'A') that carries a margin of 175bp over Libor, a DM40m seven year term loan (Term 'B') that carries a margin of 237.5bp over Libor and a DM50m six year revolving credit that carries a margin of 162.5bp over Libor.